Inventory hits a new recent low, causing spot premiums to jump initially and then pull back today [SMM spot copper in South China]

SMM May 27:

Today, spot prices of #1 copper cathode in Guangdong against the front-month contract were reported at premiums of 180 yuan/mt to 260 yuan/mt, with an average premium of 220 yuan/mt, unchanged from the previous trading day. SX-EW copper was reported at premiums of 120 yuan/mt to 140 yuan/mt, with an average premium of 130 yuan/mt, also unchanged from the previous trading day. The average price of #1 copper cathode in Guangdong was 78,560 yuan/mt, down 25 yuan/mt from the previous trading day, while the average price of SX-EW copper was 78,470 yuan/mt, down 25 yuan/mt from the previous trading day.

Spot market: Inventory in Guangdong has declined for two consecutive days, hitting a recent low, primarily due to limited arrivals. Stimulated by this, suppliers actively refused to budge on prices to sell their cargoes. In the morning session, some traders held prices at 250 yuan/mt, but downstream buyers were reluctant to purchase due to the significant increase. Suppliers had to lower their prices to 180 yuan/mt, after which overall trading activity was moderate. As of 11 a.m., high-quality copper for the front-month contract was reported at 260 yuan/mt, standard-quality copper at a premium of 180 yuan/mt, and SX-EW copper at a premium of 130 yuan/mt. The market expects inventory to remain at low levels in the near future without a significant increase.

Overall, the recent low in inventory caused spot premiums to jump initially and then pull back today. Attention should be paid to the arrival situation in the near future.

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